Revocable Trust

The best (and shortest) answer I can give to anyone who asks why they need a Trust: because a Trust doesn’t die!

With or without a will, if you are the sole owner of an asset upon your death and there’s no beneficiary already linked to it, then the court has a method to oversee who is entitled to it. That’s the primary purpose of probate court. However, if that same asset is owned by a trust, then the trust dictates who receives the property, how, and when, without any court intervention or involvement.

A Revocable Living Trust is a critical component of your estate plan, both during life and after death, and works hand in hand with your will. A helpful concept is to think of a Trust as a bucket. During your life you place all of your assets into the bucket by retitling them in the name of the Trust. As Trustee, you hold the bucket handle maintaining control over the assets, but now those assets are simply gathered together in one spot, just as they were under your own name. Upon your death or incapacitation, the person or people you chose in advance will take over control of the assets in the bucket. They are the successor Trustees. They will follow the instructions you left with the bucket. Neither the use nor the taxation of the assets are affected, but the result is that when you die, your heirs don’t need to go to court to ask a judge to release property to them. The assets are already gathered and ready to be distributed based on the conditions and timetable you planned out. This saves your beneficiaries unnecessary delay, costs, and probate court headaches.

The merits of this most crucial of estate planning tools are significant and numerous:

Minimize or Eliminate Estate Tax Liability: One of the most valuable characteristics of a Trust is the ability to use both spouse’s estate tax exemption, effectively doubling the amount of assets that can pass to heirs without being subject to the estate tax or “death tax.” The Trust also contains provisions that avoid less recognizable, but just as costly taxes like the generation skipping transfer tax.

Avoid Probate: Probate court opens up your estate for public inspection and adds significant delays to the distribution of your property. You can avoid subjecting your heirs to this tedious and costly process by titling your assets in the name of your Revocable Trust. Upon your death, the successor trustee you chose will manage and distribute your estate and save your family from having to visit probate court, while maintaining valuable privacy in the process.

Ensure Prudent Management of Your Heir’s Inheritance: While many estate plans distribute your heirs’ inheritance outright, your trust can be drafted so that it divides into separate shares for each inheritor, held in trust by your trustee. This allows you to require certain conditions, such as obtaining a post-high school degree, or meet age thresholds before receiving trust funds. Meanwhile, funds can always be available for basic needs and important events like wedding expenses or tuition. This arrangement provides peace of mind that your heir’s inheritance will be managed wisely.

Plan for Incapacity: While a Power of Attorney, in theory, should allow the person you appoint the ability to manage your financial affairs if you were unable to do so yourself, practically speaking that is not always true. Financial institutions and fund managers often require a power of attorney to be completed on their own form. When you actually need to use it, it’s too late to have their form completed. A Trustee acting under his or her powers under the Trust for an account owned by the Trust is far more reliable.

Easy to Change or Cancel: A Revocable Trust is just that, revocable. During your life, it can be easily amended at any time or cancelled altogether. That means a distribution pattern that you felt comfortable with five years ago can be amended based on changed conditions. The same applies for changing your successor Trustee.

The list of benefits goes on. Contact us for a free consultation. We’ll review your goals and discuss how estate planning helps achieve them. You’ll receive a price quote on the spot or via an emailed engagement letter, giving you time to think through the consultation to decide if you’re ready to move forward. Turnaround time is usually about a week and no payment is required until you sign your documents.